3CIT is introducing a series of Blogs and Webinars on end-to-end ERP Concepts which have a direct or indirect impact on your business processes. The goal is to streamline business operations & deliver exceptional growth by enabling your business to scale up in order to compete in the Post-Covid world. For more info reach out @ Email: venkat@3citconsulting.com/ subodh@3citconsulting.com or Mobile: 98452-26565/98450-89819

1. Sales Planning Using
Master Production
Schedule
ERP Features & Functions

2. ● Sustaining long-term relationships with Customers is a key factor in today’s
competitive business environment
● Two significant blockers in meeting the above expectations is to consistently
deliver Customer required Products in requisite quality and in Customer
committed Schedules
● Meeting Quality requirements set by the Customer is subjective and hence
relatively a more complex problem to address
● Establishing a simpler and feasible approach to meeting Customer Committed
Schedules is within the reach of most Organizations
Sales Planning – Challenges in the 21st Century
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3. ● In an era of Demand exceeding Supply, your Marketing / Sales Functions
bring Orders for Products to your Organization - Demand
● Committing a feasible Delivery Schedule in response to the Demand is the
joint responsibility of the Planning + Production + Inventory Functions
● Deriving a best fit Schedule, the combined Team needs to have, at their
finger-tips, Constraints such as
○ Available Product Stock
○ A reasonably scientific idea of Production Capacity (which is Finite)
○ Available Raw-Material for a proposed Time-Period
● Without a tool backed with Data, the Team is handicapped to understand
these Constraints and hence Customer Committed Schedules are made
based on Rule-of-Thumb
Meeting Customer Schedule Commitments
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4. ● Using the Rule-of-Thumb approach, there is a likelihood of not being able to meet
Customer Commitments on Schedule
● Most Customers will retain loyalty even if you do not commit to their expected
Schedules, as long as you demonstrate the fine ability to meet the Schedule
Commitments you have pro-actively promised
● When you fail to deliver on Time, a Customer who has a choice between you and your
competitor (who both supply at presumably the same price and quality), will depend
more and more on your Competitor when you fail to meet your Schedule Commitments
We need to move away from this Rule-of-Thumb approach and use scientific,
data backed Tools and methods before committing Customer Delivery Schedules
Effects of Not Meeting Schedule Commitments
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5. Sales Planning – Concepts
What is a Sales Plan ? What Products to Produce
In which Time Period
In what Quantities
Sales Plan
(Using MPS)
Demand
Customer
Product
Required Quantity
Constraints
Product Stock Available
Production Capacity
Raw-Material Stock
Considerations
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Committed Delivery Dates

6. Sales Planning – Balancing Demand vs. Capacity
Capacity Demand
Master Production Schedule
• Delivery
Commitment
• Delivery
Priority
• Available to
Promise
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7. Demand Planning = Telescopic vs Microscopic View
Purpose
Approaching the fulfilment of Customer Demand placed on Manufacturer needs a 3-Step Methodology –
Planning, Scheduling and Loading
● Planning  At time of accepting a Customer Order, a method to identify whether the manufacturer
Resource Profile is in a position
○ to meet the required Delivery Schedule or
○ need to shuffle other Customer Orders depending on Priority or
○ committing a more pragmatic Delivery Schedule.
Generally adopted in the Time-Horizon of Month-in-Advance
● Scheduling Given the committed Delivery Schedule as per Planning, a method to schedule
different Jobs at different WIP Stages, in consideration of Resource Availability. Generally adopted in
the Time-Horizon of Week-in-Advance
● Loading  Given the Week-Plan, identify specific Jobs on specific Machines with necessary
additional resources (Operator, J-F-T, ..). Results in a Job-Card. Generally adopted in the Time-
Horizon of One-Day-in-Advance
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8. Planning Horizons
Order Booking
Sales Plan
- Delivery
Commitment
- Based on Capacity
- Based on Order
Book
- Assigns Priority
Production Planning
Production Plan
- Based on Sales Plan
- Considers Resource
Availability
- Re-Assigns Priority
based on Available
Resources
Resource Loading
Load Plan
- Short-term View of
Production Plan
(Daily)
- Real-time view of
Resource Availability
Dispatch Planning
- Packing Plan
- Shipping Plan
- Consignment
Planning
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• Short Product Life-cycles will result in distributing
the Planning Horizon into Weekly Buckets
• Longer Product Life-cycles will distribute to
Monthly Buckets similarly

9. Sales Planning – Defining Capacity
Diameter
Precision
Product
Grouping Lot Size
Cycle Time
Capacity
(in Nos. Per Week)
Metrics
Other Considerations
- Number of Shifts
- Number of Machines per Product Group
- Machine Availability (Up-Time)
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10. Demand Planning - Use Cases
Definitions
Order Book Period - is the Time-bucket in which the Orders are received and precedes the Production
Time-Bucket by your Product Lead Time. As an example, if your Product Lead Time is 2 Months, then
your Order Book Period is two months in advance of your Production Time Bucket
Order-Book Period (Time=t0) :- As Customer Orders stream in for a specific Time-Bucket, your ERP
Tool systematically fills the stated Capacity
● At Time=t1, as we progress in receiving Customer Orders in the Order-Book Period, it is likely that the next Order for
a Product in a Product Group, fitting it into the Time-Bucket will lead to exceeding the stated Capacity. System
informs you with a Red Alert. In this situation, we have choices to address this challenge
 Communicate a feasible later Time-Bucket as fit based on Capacity – to Customer – and get his Acceptance
 If Customer demands Delivery in the current Time-Bucket, re-Prioritize other Customer Orders with the same Product
Group Demand, so as to fit in this Customer Order Demand
 Increase Capacity (temporarily) – Adding Shifts, Rotating Load on Machines / Work Centers,…
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11. Demand Planning - Use Cases
● At Time=t2, in the Order-Book Period, it is likely that the next Order for a Product in a Product
Group, fitting it into the Time-Bucket will result in Demand being -/+ a pre-determined percentage of
the stated Capacity. System informs you with a Yellow Alert
● At Time=t3, close to the end of the Order Book Period, System determines that the Capacity is in
excess of the Demand for a given Product Group. System informs you with a Green Alert. In this
situation, we have choices to address this other kind of challenge
○ Inform Marketing / Sales to increase efforts to fill the Capacity for the identified Product Group
○ Identify Make-to-Stock so as to fill the Capacity
○ Reduce the Capacity – divert to other Product Group Demand so as to balance the Load
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12. Defining Capacity - Queries & Doubts
● How to set these initial quantitative numbers of Capacity by Product Group ?
○ There are basically two approaches, as below :-
■ A scientific method applying principles of Time-Study, Load Balancing and Through-Put
■ Start with your Rule-of Thumb (!)
● Stated Capacity set initially may vary with time, how to reset this Number ?
○ With an established ERP System, the post-Production Module provides Numbers actually
produced for a given Product Group in a Production Time-Bucket
○ We can use this input to analyze and reset the Capacity definitions
○ Essentially, this is a Closed-Loop-Feedback mechanism as represented in the next slide
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13. Redefining Capacity – using ERP
Planning
Scheduling
Loading
Production
Capacity Master Data
Analysis
Refine
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14. Sales Planning Engine
Dynamic inputs
● Pending orders for next
two months - customer,
product, quantity,
dispatch date
Static inputs
● Production capacity &
cycle time / (family +
dia)
● % buffer(planning
mismatch)
● M/C downtime
Resources
● # of machines/Product
group
● # Shifts
Scheduling
Algorithm
●status
○ 100% plan - green
○ 90% to 100% plan -
yellow
○ Less than 90% - red
(common to order &
status - the actions
needed by planning &
mgmt will be different)
Order status - Rule
set 1
●Green - no action
●yellow - approval
from production
●Red - approval from
GM
System status - Overall
utilization
●Green - warning to
mgmt to plan for “make
to stock”, pull up
production
●Yellow - information
●Red - trigger for
possibility of pushing the
orders, adding shifts
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15. Sample Sales Plan – Dashboard View
Start date 1-Aug-2020 5-Aug-2020 12-Aug-2020 19-Aug-2020 26-Aug-2020
End date 3-Aug-2020 10-Aug-2020 17-Aug-2020 24-Aug-2020 31-Aug-2020
# Working days 3 6 5 6 6
Product GRP Demand
# days / Prod
GRP
29th Jul - 3rd
Aug
5th Aug - 10th
Aug
12th Aug - 17th
Aug
19th Aug -
24th Aug
26th Aug - 31st
Aug
Capacity
Overflow (In
Days)
System
status
D1 1474 16.96 3.0 6.0 5.0 3.0 0.0 0.0 100%
D2 6368 37.45 3.0 6.0 5.0 6.0 6.0 11.5 69%
D3 8347 20.27 3.0 6.0 5.0 6.0 0.3 0.0 100%
D4 7502 30.73 3.0 6.0 5.0 6.0 6.0 4.7 85%
Total 23691
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16. ● An ERP System, backed by static and dynamic data is essential to planning
Production to meet the competitive nature of today’s Customer Demand
● Rule-of-Thumb approaches are Risk-Prone
● Once your Organization has embarked on adopting the proposed approach
of using ERP, it is essential to monitor the results – we should follow the
universally accepted Deming Principle – Plan 🡪 Do 🡪 Check 🡪 Act
(PDCA)
● The PDCA monitoring mechanism will help to understand what needs to be
tweaked, improved, areas of Innovation, so on and so forth
Sales Planning – Conclusions
ERP Concepts – An initiative of 3CIT Consulting Page 16

17. About the Author
● Subodh, currently serving as Founder Director of 3CIT Consulting, based out
of Bangalore has a rich and varied background in ERP Consulting
● He has managed more than 100 ERP Assignments, in various roles, ranging
from Design, Development, Implementation in the initial phases to ERP
Requirements Engineering, Process Change Management in the recent past
● Subodh has exposure to the world leading ERP Software Platforms such as
SAP, Oracle and BAAN. At the same time, he has participated in ERP
Projects involving Open-Source ERP solutions such as Odoo (OpenERP)
● Please feel free to reach out to Subodh at subodh@3citconsulting.com or
on his cell No. 98450-89819
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